Trade In Services: Global Regulation and the Impact on Key Service Sectors

Some even moved into the higher end. American companies were then forced to find newer, deeper specialties in the expanded market. If that weren't happening, Intel would be out of business today. Instead, it is thriving. Paul Otellini, Intel's president, told The Economist (May 8, 2003) that as chips become good enough for certain applications, new applications pop up that demand more powerful and more complex chips, which are Intel's specialty. Once Google starts offering video searches, for instance, there will be demand for new machines and the chips that power them, of which no one was even dreaming five years ago. This process takes time to unfold. But it will, argued Bhagwati, because what is happening in services today is the same thing that happened in manufacturing as trade barriers were lowered. In manufacturing, said Bhagwati, as the global market expanded and more and more players came onto the field, you saw greater and greater “intraindustry trade, with more and more specialization,” and as we move into the knowledge economy, you are now seeing more and more intraservice trade, with more and more specialization ...»